The Tariff Mirage

Economic nationalism, political theater, or both?

Since his first presidency, Donald Trump has been fixated on tariffs as a primary tool of economic policy. In his second term, he has once again escalated trade wars, imposed heavy tariffs on foreign imports, and shifted blame onto his political opponents. But are these measures truly benefiting Americans, or are they simply distractions from the chaos of his Administration? Let's break down Trump's ongoing tariff crusade, its history, and its real impact.

A Look Back: Trump's First Trade War

During his first term, Trump imposed tariffs on steel and aluminum imports in 2018 under the guise of national security. The goal was to revive American manufacturing, force China to change its trade practices and reduce the trade deficit. A full-blown trade war followed, particularly with China, as both countries imposed tit-for-tat tariffs on billions of dollars worth of goods.

The results? While some U.S. steel manufacturers benefited, many American industries relying on steel and aluminum saw higher costs, ultimately passing those costs onto consumers. American farmers, a core part of Trump's base, were hit particularly hard when China retaliated by imposing tariffs on American agricultural products. Soybean farmers suffered immensely as China, the largest buyer of U.S. soybeans, drastically cut its imports. Prices plummeted, leaving farmers with unsold surpluses and financial hardship–something I remember vividly having been on the receiving end while sitting in former Vice President Pence's office getting their angry calls. (They were also angry at the immigration raids back then, I can only imagine what they're saying now…) The Administration attempted to mitigate the crisis with billions in taxpayer-funded bailouts. The program eventually totaled approximately $28 billion. With Trump's kind of government spending, it is no wonder DOGE is needed. Oh..wait. Sure, blame Biden again.

Despite Trump's claims of bringing manufacturing back to America, studies showed little evidence of widespread reshoring. Instead, companies either absorbed the higher costs or moved production to countries unaffected by the tariffs, such as Vietnam or Mexico. Meanwhile, China diversified its trade relationships, strengthening ties with Europe and other Asian markets. In short, the tariffs hurt both economies but failed to achieve their intended objectives.

Trump's Second-Term Tariff Escalation

In his second term, Trump has returned to his protectionist playbook, imposing even steeper tariffs. In addition to raising tariffs on China, he has implemented a 25% tariff on all Canadian and Mexican imports, citing concerns over immigration and drug trafficking. This drastic escalation has raised alarms among economists who fear retaliatory measures from trade partners, potential supply chain disruptions, and increased consumer prices. According to Axios, during Trump's first term, tariff revenue accounted for about 1.5% of total U.S. goods imports, which nearly doubled by 2019. This historical context underscores the escalation in tariff policies and their potential implications on trade dynamics. Furthermore, as a result of Trump's aggressive tariffs talk, Mexicans rallied behind President Sheinbaum this past Sunday in Mexico City's iconic Zocalo, in a show of national unity against what many view as economic bullying from the United States. Trump is doing a great job of unifying the citizens of other countries—against us.

Economic Nationalism Disguised as Security Policy

One of the latest spin tactics used by Trump and his allies, like New York's Republican Congresswoman Rep. Nicole Malliotakis and White House economic adviser Kevin Hassett, is reframing the tariff policy as a "Drug War" rather than a trade war. They claim these measures are necessary to fight the influx of fentanyl and other drugs from Mexico and China while also blaming President Biden's economic policies for supposedly forcing Trump's hand into raising tariffs. The inclusion of Canada in Trump's drug trafficking justification is particularly puzzling to policy experts, as U.S. law enforcement data shows that Canada accounts for less than 1% of fentanyl seizures at U.S. borders, making the drug trafficking rationale for Canadian tariffs especially tenuous.

The reality is that there is no credible evidence that tariffs have any effect on reducing drug trafficking. Illicit drugs like fentanyl primarily enter the U.S. through legal ports of entry, often smuggled in commercial shipments or carried by individuals. By shifting the conversation from economic policy to a so-called war on drugs, Trump is attempting to rally support among voters who may not understand the actual implications of tariffs.

Who Actually Pays for Tariffs?

One of Trump's biggest mischaracterizations in his first term and now is that foreign countries pay for tariffs. In reality, tariffs are a tax on imports, which means American businesses and consumers bear the brunt of the costs. When Trump imposed tariffs on Chinese goods, U.S. companies either had to absorb the higher costs or pass them on to consumers. This led to higher prices on everyday goods, from electronics to clothing.

As Trump doubles down on tariffs in his second term, Americans should expect even more price hikes. With tariffs on Canadian and Mexican imports, industries that rely on cross-border trade—including automotive, agriculture, and energy—will see major cost increases. This could mean higher grocery bills, pricier cars, and even increased fuel costs, creating economic hardship, particularly for lower- and middle-income families.

Did Trump's First Trade War Hurt China?

One of Trump's favorite talking points is that his tariffs brought China to its knees. But the evidence doesn't support this claim. While the trade war initially slowed Chinese exports to the U.S., China adapted by shifting trade elsewhere. They increased exports to Europe and Asia, sought alternative markets for their goods, and ramped up domestic consumption.

Additionally, China doubled down on its long-term economic strategy, investing heavily in technology and manufacturing independence. If anything, Trump's tariffs pushed China to become less reliant on American trade, undermining the leverage the U.S. once had. Ultimately, the tariffs did not achieve their goal of forcing China to change its trade policies.

Given the economic failures of his first trade war, why is Trump repeating the same strategy in his second term? Facing mounting controversies due to the chaos of DOGE and legal challenges to his Administration's unlawful efforts, Trump has once again turned to his favorite scapegoats: immigrants, drugs, and foreign competition.

By framing tariffs as a response to complex problems like illegal immigration and drug trafficking, Trump is offering simplistic solutions that economic evidence suggests are ineffective. These issues require multifaceted approaches—not economic protectionism.

While tariffs may seem like abstract economic policy, their effects are anything but theoretical for average Americans. Many consumers don't realize they're paying Trump's tariff tax when prices rise at grocery stores, car dealerships, or electronics retailers. Car prices may increase as much as $12,000! According to economists' projections, a typical American family of four can expect to pay an additional $1,200 to $2,400 annually due to these tariffs—equivalent to wiping out much of the benefit from recent tax cuts. Beyond immediate price hikes, retirement accounts and investments suffer as markets react to trade uncertainty, with the recent stock market volatility directly linked to escalating tariff threats. For workers in export-dependent industries like agriculture, manufacturing, and technology, these policies threaten job security as international markets close to American products in retaliation. The tariffs represent not just an economic policy choice but a direct tax on American households when many are already struggling with inflation and financial uncertainty.

What Americans Can Do

Faced with the economic impact of escalating tariffs, everyday Americans aren't powerless. First, consumers can practice strategic purchasing by buying durable goods before prices increase further and exploring alternatives to heavily tariffed products. Homeowners and businesses planning renovations or expansions should consider accelerating timelines before building material costs rise more dramatically. On a civic level, we can contact our congressional representatives. Remind Congress they technically hold constitutional authority over trade and can check executive power on tariffs. Time to use it! 

Furthermore, we are seeing some of this happen, but let's remind ourselves never to underestimate the power of our collective action. Industry associations, from agriculture to manufacturing, are actively lobbying against these measures, and individual citizens can amplify these efforts by joining advocacy campaigns. If you're a small business owner who is particularly affected by supply chain disruptions along the way, I strongly encourage you to document and share your experiences with local media and elected officials. Send me a note-I will help you!

By understanding which products face tariffs and how these policies affect our communities, we can make informed economic decisions while exercising our democratic right to question policies that directly impact our financial well-being.

The Future of Trump's Tariff War

As Trump escalates his tariff policies, economic experts are concerned that the consequences for the U.S. economy could be severe. Higher costs for businesses and consumers due to trade retaliation from allies–in case you missed it, Kentucky Bourbon has been pulled off Canadian stores' shelves, and disruptions to global supply chains could all contribute to economic instability. These concerns are no longer theoretical—financial markets are now showing signs of serious distress, with major Wall Street analysts warning that the escalating tariff situation could push the U.S. economy into recession as early as the third quarter of 2025.

Ultimately, Trump's obsession with tariffs reflects his broader approach to governance: political posturing rather than sound economic policy. While his base may cheer the tough rhetoric, American consumers and businesses will once again pay the price for his trade war…and so will his base.

Whether President Trump will adjust course or double down on his protectionist policies remains to be seen. However, one thing is certain: the economic burden of these tariffs will fall squarely on the shoulders of all of us everyday Americans, not on China, Mexico, or Canada.